With the Quad Strategic Dialogue between Japan, the United States, Australia and India becoming part of a “free and open Indo-Pacific”, the importance of Southeast Asia is once again. recognized. In October of last year, Prime Minister Yoshihide Suga visited Vietnam and Indonesia, and the Japan-Indonesia Foreign and Defense Ministers’ so-called “2 + 2” meeting was held. in March this year in Tokyo. The prime minister was also due to visit the Philippines from the end of April, but that plan has been postponed due to the spread of COVID-19.
The collaboration with Vietnam and the Philippines is easy to understand. The two countries face China directly in the South China Sea. But why Indonesia? Indonesia accounts for 40% of Southeast Asia’s population and 36% of the region’s economy. However, he is not facing China. In fact, Indonesia attaches great importance to Japan and China in terms of economic cooperation, and Jakarta has built its own security policy on the basis of a US-centric security system. This posture is reflected in Indonesian diplomacy “centered on the Association of Southeast Asian Nations (ASEAN)”, “unaligned, neutral” and “free and active”.
However, ASEAN has been adrift for almost a decade. The confrontation between the United States and its allies and partners and China will become more intense. China is likely to behave more and more like an assertive great power. So how is Indonesia likely to change?
Since the Asian financial crisis of 1997-1998, Indonesia has grown steadily. Between 2000 and 2019, its population grew from 205 million to 268 million, and its nominal dollar GDP from $ 0.18 trillion to $ 1.1 trillion. As a result, its share in the world economy increased from 0.54%, or 27th in the world, to 1.27%, or 16th, and its share in the ASEAN economy increased from 28% to 36%. In other words, Indonesia is an emerging Asian country after China and India in terms of population and economic scale, and if we define a middle power as a country that represents 1 to 3% of the world economy, Indonesia is the only middle power. power in Southeast Asia.
This recent development is the basis on which Indonesians envision their future. According to the government’s “Vision for Indonesia 2045†announced by President Joko Widodo in 2019, the population will reach 320 million in 2045, the centenary of Indonesia’s independence. The rate of urbanization is expected to rise from 50% in 2010 to 69% in 2045, and the Jakarta-Bandung area around the capital in particular is expected to have 76 million inhabitants in 2035, double the population of the greater Tokyo metropolitan area. In addition, if the economy grows on average 5.1% per year between 2010 and 2045, the per capita domestic income is expected to reach $ 19,800 in 2045, making Indonesia the world’s fifth largest economy after the United States, China, India and Japan.
This is only a forecast. However, in many cases a country’s grand strategy is decided on the basis of the assumption that predictions will come true. So what are the challenges? There are three major problems.
The first challenge to be solved is urbanization. The greater metropolitan area of ​​Jakarta, as well as regional central cities such as Bandung, Semarang and Surabaya on Java Island, Medan and Pakanbaru in Sumatra, Balikpapan in Kalimantan and Makassar in Sulawesi, are expected to experience annual economic growth of over 9%. on average from 2020 to 2030. But even with this economic expansion, when the population of the Jakarta-Bandung region reaches 76 million in 2035, the political issues that will need to be addressed, from infrastructure development to education and employment, will be huge. Economic cooperation must continue to be highly valued to tackle the problems.
The second challenge is the development of human resources and scientific and technological innovation. Real per capita national income in Indonesia has more than doubled from a benchmark of 100 in 2000 to 208 in 2019. With income growth this high, people expect their lives to continue to grow. to improve and their children’s lives to be much better. The keys to meeting these expectations are the development of advanced human resources, the promotion of innovation and the attraction of investments. To achieve this, Indonesia must remain a country open to the international market.
The third problem is national security. Indonesia’s military spending has stagnated from 1.4% of GDP in 1990 to 0.7% in 2000, 0.9% in 2015 and 0.8% in 2021. As a result, military spending of Indonesia are less than 3% of those of China, 11% of those of India and even less than that of Singapore, according to 2018 figures. However, given that its economy is expected to be the fifth or largest sixth largest in the world by 2045 and that maintaining the balance of power in the Indo-Pacific is of critical importance to its own security, Indonesia is unlikely to remain a “small military power” in the world. the future.
Former President Susilo Bambang Yudhoyono spoke of maintaining a “dynamic balance” in the Indo-Pacific. President Joko Widodo also called Indonesia a “maritime axisâ€. Earlier this year, Defense Minister Prabowo Subianto announced a $ 125 billion defense equipment procurement plan for the period ending 2024.
Indonesia will remain a “non-aligned and neutral” and diplomatically “free and active” country. At the same time, it could try to play a much bigger role in security affairs beyond ASEAN than it currently does.
However, given the impact of the COVID-19 crisis over the past year and a half, it is difficult to say whether this progress will be as smooth as it has been in the past. The income gap between the formal and informal sectors is widening. As the crisis continues, households and businesses are losing room for maneuver. It will become increasingly difficult to steer macroeconomic policies. And the Islamists are provoking the regime every moment.
The economy is expected to recover in 2023, but by then the “political season” will have started, with presidential and legislative elections in 2024. This means that President Joko Widodo’s second term will end. will end with its response to COVID. -19. Who will become president in the next elections under what political and economic conditions? And what sort of ruling coalition will be formed? This will be of great importance for Indonesia’s future grand strategy.
(By Takashi Shiraishi, Chancellor, Kumamoto Prefectural University)
